Don’t be in the minority

With the excitement of Christmas and New Year’s Eve behind us, most of us are looking forward to the year ahead, full of plans and optimism. January often feels like a month dedicated to fresh starts, but before beginning a new year of business we need to wrap up last year’s tax returns and meet January’s pressing deadlines. For many of those in the tax profession, the new year signifies an alarming reality…. that the 31^st January deadline is closer than they probably would feel comfortable with. It is the time of year where stepping outside in the daylight becomes a rarity as clients need to be chased more and more often with longer hours worked to ensure that clients returns are prepared and filed before 31 January 2020. Based on last year’s numbers and figures, there were a total of over 11.5 million self assessment tax returns that needed to be filed and record breaking 93.68% of these were filed on time (that is a total of 10,833,177 being filed by 11:59pm on 31 January 2019]). Although that sounds great, it still means that a total of 731,186 missed the deadline. Why do we mention this… well quite simply because if you file a return late, then HMRC will immediately issue late filing penalties with their penalty regime as follows:

• an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time;
• after 3 months, additional daily penalties of £10 per day, up to a maximum of £900;
• after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater; and
• after 12 months, another 5% or £300 charge, whichever is greater.
• There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months.

Therefore, if you only file a return by say 1 June 2020, you could receive a late filing penalty of £1000+ [this excludes the late payment surcharge that HMRC will also levy on any late payment of self-assessment tax liabilities]. The message here is that if you currently have a tax adviser who assists you to prepare your returns, then now would be the time to act and begin to gather the information to provide to them sooner than later. Not only would it help them manage their own workload and reduce the risk of errors on your returns that they prepare, but this will also mean that you will know sooner the amounts of tax (if any) that you will need to pay by 31 January 2020. Try not to be one of the 735,258 that file their returns or provide this to their adviser on the last day. Should you feel like you need assistance to get your returns for 2018-19 prepared, ready and filed as soon as possible, then please do not hesitate to contact one our personal tax specialists on 020 8429 9245 or email [email protected] where you will be able to speak to one of the team.